Uncategorized —

BlackBerry maker out of options in legal fight

Don't count on your BlackBerry in the next couple of months if you live in the …

Although the BlackBerry hasn't been much of a hit with the general public, business types find it indispensable because of its easy-to-use interface, calendar sync ability, and push e-mail capabilities. That last item on the list has proven to be a sore spot for handheld-maker Research In Motion, which has been embroiled in a long-running legal battle with patent-holding corporation NTP. RIM may be looking at writing a very expensive check to NTP or stopping US sales and support for the BlackBerry, as US District Court Judge James Spencer decided not to enforce a preliminary US$450 million settlement reached between the two parties earlier this year.

At issue are 11 NTP patents that cover much of the technology used in the BlackBerry. In 2003, a federal jury ruled that RIM had infringed on those patents and awarded NTP $23.7 million in damages. RIM appealed, but the judge hearing the case upheld the jury's decision and granted NTP an injunction which bars RIM from selling BlackBerry devices in the US and offering push e-mail capabilities on systems already supported. However, he also stayed that injunction during an appeal.

Since that time, RIM has pursued a multipronged strategy in its attempts to continue selling and supporting the handhelds. It has continued its appeals in the legal system and challenged the validity of NTP's patents, while engaging in on-again, off-again settlement talks with the patent-holding company. The appeals process has ultimately proven fruitless for RIM, as the US Court of Appeals refused to overturn the decision of the lower court, and the Supreme Court declined to hear the case.

On the patent review front, RIM has been successful in getting five of the patents preliminarily invalidated by the US Patent and Trademark Office. However, as readers who have paid attention to the various patent disputes we've covered over the years will know, the review process takes a long time--time RIM no longer has. And in today's ruling, Judge Spencer ruled out the possibility that enforcement actions may be stayed pending the completion of the USPTO's reviews.

At this point, NTP holds all the cards. There is no longer any reason for the injunction to be stayed, as RIM's legal options appear to be utterly exhausted. RIM has the US Department of Justiceon its side at least. In a brief filed on behalf of RIM, the DoJ argued that a disruption in RIM's service would be harmful to the government due to the number of federal employees using the devices. A simple workaround would be a whitelist of government accounts which could be kept on.

With the preliminary agreement from March no longer valid and the threat of being shutdown in the US hanging over its head, RIM will need to be very amenable to NTP's demands. US$450 million probably looks very good to RIM now, but NTP will be looking for substantially more. I wouldn't be surprised to see a stipulation that required RIM to drop its patent appeals in a settlement. Whatever NTP wants, it will likely get, unless RIM decides to wash its hands of its largest market.

Eric Bangeman
Eric has been using personal computers since 1980 and writing about them at Ars Technica since 2003, where he currently serves as Managing Editor. Twitter@ericbangeman